Litigation PR eases trials and errors

Since litigation over the often-lethal health hazards of asbestos began in the 1970s, plaintiff attorneys have battled corporationsâboth in the courtroom and in the court of public opinion. Recently, however, some plaintiff attorneys have begun to see the corporationsâ point of view.

For instance, the American Bar Association last month voiced its support for federal legislationâbacked by, among others, the National Association of Manufacturers and its Asbestos Allianceâthat would restrict asbestos litigation.

Part of the reason for the shift in opinion at the ABA and elsewhere, according to some observers, is the asbestos defendantsâ effective use of litigation public relations.

"A good job is being done in some ways by those in the cross hairs of asbestos litigation," said Victor Schwartz, a partner at the Washington office of law firm Shook, Hardy & Bacon L.L.P. Schwartz is a proponent of legislation to reform asbestos litigation.

Litigation PR, an increasingly visible discipline of marketing communications, can be broadly defined as the communications that a party to a court case uses to speak to audiences outside the courtroom. Over the past decade, many PR firms have established litigation communications departments.

"Ketchum formed a litigation PR practice for two reasons," said Karen Doyne, senior VP-director of litigation communications at the PR agency. "In recent years our corporate clients were increasingly facing litigation, and increasingly that litigation was being carried out in the public spotlight."

When embroiled in a court case, a corporation has two main concerns, Doyne explained: "Its legal goals and its business goals. A company may survive the financial impact of a lawsuit, but damage to its reputation may be devastating."

Litigation PR experts cite as poor PR the messages sent out by Bridgestone Corp. and Ford Motor Co. when responding to the deaths of scores of people driving Ford Explorers equipped with Bridgestoneâs Firestone tires. Data about the crashes trickled out slowly. Litigation PR practitioners say a rule of thumb is to get information to the press as quickly as possible.

On the other hand, observers cite as exemplary PR the response by Deerfield, Ill.-based Baxter International Inc. to deaths caused by cleaning fluid residue in dialysis filters made by the company. When it became apparent that the filters were to blame, Baxter recalled the product and announced the move to the press. Additionally, it quickly settled all lawsuits in the case.

Sally Benjamin Young, Baxterâs VP-communications, said the company was merely adhering to its policies, which include "shared values" of respect, responsiveness and results. The avoidance of costly litigation, while a contributing factor to the companyâs approach to the crisis, was not paramount, she said. "We didnât lead with, âThis is going to cause litigation,â " she said.

High-stakes situations

Itâs clear that litigation can affect a companyâs share price and brand equity. And, of course, a courtroom loss can result in a huge judgment that can gouge the bottom line. In short, the stakes are high for corporations enmeshed in lawsuits, which is why litigation PR has become more prominent in the past decade.

"Maybe the stakes being higher has made [litigation PR] more visible," said Kent Mathewson, partner at Chicago law firm Donahue, Brown, Mathewson & Smyth.

In the past few months, several companies have released statements detailing the funds set aside to pay current and anticipated asbestos-related claims. For instance, Travelers Property Casualty said its asbestos reserves now total $3.4 billion, up from $950 million on Sept. 30, 2002.

A 2002 study by Randâs Institute for Civil Justice found that 300 companies were involved in the initial round of asbestos lawsuits. Now, more than 6,000 are involved, as plaintiff attorneys have moved beyond the original miners and processors of asbestos to companies that used the substance as a component in their products. The study found that asbestos litigation could ultimately cost corporate America $264 billion.

With such astronomical financial stakes, itâs no surprise that corporations involved in asbestos litigation have turned to organizations such as the Asbestos Alliance, a nonprofit group of asbestos defendant companies, to influence press coverage. Until the past few years, most asbestos media coverage focused on the dangers posed by the substanceâdiseases such as a powerful form of cancerâand the responsibility of corporations such as W.R. Grace & Co. and Johns Manville Corp. to provide compensation to the victims.

Sensing the danger to their bottom lines, corporations and their insurers have mobilized to tell their side of the story. According to Shook, Hardy attorney Schwartz, it is an organized communications effort that has hammered on three key points:

â¢First, they have argued that many companies now being sued were only involved obliquely with asbestos. They didnât mine or process it; they merely used it as a component. They call themselves "peripheral defendants." â¢Second, the communications efforts of the Asbestos Alliance, the Insurance Information Institute and others have described some plaintiffs as "unimpaired claimants." They claim these plaintiffs have been exposed to asbestos but are not yet "sick," and they are siphoning funds away from those who are truly suffering from asbestos-related diseases. â¢Third, the communications have focused on the growing number of bankruptcies and the macroeconomic impact of asbestos litigation. The Rand study found that at least 60 companies had filed for bankruptcy by spring 2002 because of asbestos liability exposure.

"Your average CEO in the insurance industry says asbestos is a more serious problem than terrorism," said Robert Hartwig, chief economist at the Insurance Information Institute.

These messages are beginning to appear in the press. A search of Factiva.comâs database showed that news stories containing the words "asbestos" and "peripheral defendant" jumped from five in 2000 to 26 in 2001 and 25 in 2002. Similarly, stories containing the words "asbestos" and "unimpaired claimants" increased from two in 2000 to 17 in 2001 and 30 in 2002.

While corporations pound their messages home, the Association of Trial Lawyers of America is using its own media relations team to try to turn the asbestos litigation story back toward those they say are the real victims: those dying of asbestos-related diseases.